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Opinions John Kim
PayPal Holdings Inc.PYPLBUYOct 31, 2016
John KimStock price when the opinion was issued
As of Jun 18, 2026. Market Open.
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Premium contentAs sector e-commerce sales have returned to pre-pandemic levels, we reiterate this online payment fintech as a TOP PICK PICK. It trades 18x earnings, supports a ROE of 18%, and trades at 3.4x book. We like that quarterly cash reserves are growing, while shares are bought back. We recommend trailing up the stop (from $50) to $53, looking to achieve $74 -- upside potential of 20%. Yield 0%
(Analysts’ price target is $74.82)
He's been bearish this all year until recently. Could be potential. It has 428 million active users, 35 millions merchants and annual payments are $1.5 trillion. Enormous. Bad news is there's a lot of competition: Apple Pay, Google Pay, Shopify. That's why shares have been down and trading half the PE of its peers. Is down 14% this year. There's a new CEO with a good track record; he will shrink the cost base and find more revenue.
Premium contentHe still owns a small position, less than 1%. Leader in transaction and payment processing. Venmo has taken off extremely well in Europe, not as much traction in NA. Reporting has been great, new CEO. Good runway.
(Analysts’ price target is $85.00)
Kim Bolton
Shares have come down a lot to 11x forward PE. The payments space is risky, and PYPL has lost market share. They have Venmo, are on Amazon as payment system, generate free cash flow, and new managers are oriented to profitability.
(Analysts’ price target is $76.12)
John ZechnerPremium contentRecently reported earnings beat analyst expectations. If the small business segment of customers, their bread and butter, can show improvement going forward there is great upside. It trades at 15x earnings, under 3x book value and supports a 20% ROE. Cash reserves are stable, while the company aggressively buys back shares. We recommend a stop-loss at $37, looking to achieve $76 -- upside potential over 30%. Yield 0%
(Analysts’ price target is $76.73)
There was a lot of concern because of V-N and MA-N and their one click check out. But PYPL-Q came to agreements with them. Even with Apple pay you are seeing a slower ramp up than they had hoped for. It is fairly valued. It should do better as the world slowly turns over to a digital economy.